BCA Research says that emerging markets are no longer homogeneous, and that the ability to discriminate among them will become increasingly essential.

“Our Emerging Markets Strategy service highlights the importance of being selective within the emerging world,” BCA says in a research note.

“The correlation among emerging equity markets and equity sectors has fallen dramatically in recent weeks,” it observes. “This has largely been driven by fundamental factors such as varying valuations in different segments of the equity universe, as well as diverging country trends in inflation, interest rates and cyclical growth profiles. We expect these divergences to persist heading forward.”

“Three of our current top picks are Thailand, Taiwan and Korean industrials,” BCA concludes.